What is one way firms can increase productivity?

Specializing workers in the production process is a widely recognized strategy for increasing productivity in firms. When workers focus on a specific task or function, they can become more skilled and efficient at that task, resulting in higher output levels and reduced production times. This concept is rooted in the principles of division of labor, where breaking down a complex production process into simpler tasks enables workers to hone their skills and work more efficiently.

By specializing, firms can also optimize their workflow and reduce waste, as workers are more familiar with their designated tasks and require less time to switch between activities. This specialization can lead to innovations in processes and improved quality of goods or services, further enhancing overall productivity.

In comparison, the other options would likely hinder productivity. Reducing the number of workers may lead to decreased capacity to produce goods or services. Minimizing capital investments could restrict firms from acquiring necessary equipment or technology that might enhance production efficiency. Decreasing technology use typically results in slower processes and a lower output, as modern technology often streamlines production tasks and improves accuracy.